In an interview with Judy Woodruff, Republican presidential hopeful Herman Cain said Monday that allegations that he sexually harassed two women were "baffling" and, that in his opinion, his behavior had not been inappropriate. He also discussed his foreign policy plans and his 9-9-9 tax plan.

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JUDY WOODRUFF:

Herman Cain, the latest Republican presidential candidate to lead in the polls, spent the day rebutting sexual harassment charges, including, as you will hear shortly, here on the NewsHour.

Asked repeatedly about the claims, he dismissed them as baseless.

The story first reported last night on news website Politico.com alleged that when Cain was head of the National Restaurant Association in the 1990s, at least two female employees reported inappropriate behavior to senior members of the organization.

The Politico story said — quote — "The women complained of sexually suggestive behavior by Cain that made them angry and uncomfortable, the sources said, and they signed agreements with the restaurant group that gave them financial payouts to leave the association."

For its part, the National Restaurant Association says it doesn't comment on personnel matters.

Today, Cain denied the reports for the first time in an appearance on FOX News Channel.

And in an appearance at the National Press Club, he conceded he knew about the investigation.

HERMAN CAIN:

While at the Restaurant Association, I was accused of sexual harassment, and it was concluded after a thorough investigation that it had no basis.

As far as a settlement, I am unaware of any sort of settlement. I hope it wasn't for much, because I didn't do anything.

JUDY WOODRUFF:

Asked if his rivals were helping to fuel the flames of this story, he said:

HERMAN CAIN:

I told you this bull's-eye on my back has gotten bigger.

(LAUGHTER)

HERMAN CAIN:

I have no idea. We have no idea the source of this witch-hunt, which is really what it is. We have no idea. We've been busy trying to get my message out.

JUDY WOODRUFF:

Today's responses were in contrast to Cain's no-comment of yesterday.

The report comes at a critical time for Cain. He leads the Republican field nationally and is ahead in a key early state, with a new Des Moines Register poll showing him on top in Iowa.

And now to our Herman Cain interview. I talked to him just a short while ago.

It's the fifth in our series of vote 2012 conversations with the Republican presidential contenders.

Herman Cain, thank you for talking with us.

HERMAN CAIN:

Thank you, Judy. Delighted to be here.

JUDY WOODRUFF:

Well, as we just saw in that piece, you were saying you did not sexually harass anyone. Let me just ask you, though, a couple of questions —

HERMAN CAIN:

Sure.

JUDY WOODRUFF:

— to help us understand this. Setting that question aside, what was your relationship with these two women who are making these allegations?

HERMAN CAIN:

Well, both of them reported to someone who reported to me at the National Restaurant Association, and so they were employees of the Restaurant Association. One of them made a formal charge that I turned over to my general counsel to follow up on to get it resolved. He did — came back after several months and said there's no basis to it. She couldn't find anyone to corroborate her story. So it was a false sexual harassment claim.

JUDY WOODRUFF:

And what about the other woman?

HERMAN CAIN:

The other one I never even knew that that was a claim, formally or otherwise. Totally have no idea.

JUDY WOODRUFF:

Do you know what incidents or — either incident or incidents they're talking about? And were you ever alone with either one of these women?

HERMAN CAIN:

The answer is — not in a social setting, but maybe in an office or something like that, and we'd have a big convention in Chicago.

One incident with the one who made the formal charge, the only one that I could recall after a day of trying to remember specifics, was once I referenced this lady's height and I was standing near her, and I did this saying, you're the same height of my wife, because my wife is five feet tall and she comes up to my chin. This lady's five feet tall and she came up to my chin. So obviously she thought that that was too close for comfort. It showed up in the actual allegation. But at the time when I did that, you know, it was in my office, the door was wide open, and my secretary was sitting right there, as we were standing there and I made the little gesture. Other than that, I can't even recall what some of the other things were. And as I mentioned, they were all found to be baseless.

JUDY WOODRUFF:

And there was some mention of a hotel room at a convention or at a meeting. Did any one of these women, were they ever asked to meet you, or….

HERMAN CAIN:

That I absolutely do not recall. You know, I have no recollection of that.

JUDY WOODRUFF:

Was there any behavior on your part that you think might have been inappropriate?

HERMAN CAIN:

In my opinion, no. But as you would imagine, it's in the eye of the person who thinks that maybe I crossed the line.

I worked for the Department of the Navy, the Coca-Cola Company, Pillsbury, Burger King, Godfather's Pizza — years and years and years of working in the business environment, working around men, women, all types of people — never, never accused of any sort of sexual harassment. I have never sexually harassed anyone. And so this false allegation to now come up is kind of baffling.

JUDY WOODRUFF:

So were — have there ever been any other charges leveled against you of this nature that you're aware of?

HERMAN CAIN:

No. No, no. None ever that I am aware of.

JUDY WOODRUFF:

And in terms of the settlement which was reached by the Restaurant Association, you as the CEO were not aware of that, or you were aware of that?

HERMAN CAIN:

I was not. I was aware that an agreement was reached. The word "settlement" versus the word "agreement," you know, I'm not sure what they called it. I know that there was some sort of agreement, but because it ended up being minimal, they didn't have to bring it to me. My general counsel and the head of human resources had the authority to resolve this thing. So it wasn't one of those things where it got above a certain authority level and I had to sign it. If I did — and I don't think I did — I don't even remember signing it because it was minimal in terms of what the agreement was.

JUDY WOODRUFF:

And we were told five figures. But let's move on because —

HERMAN CAIN:

OK.

JUDY WOODRUFF:

— there are plenty of issues to talk about.

And first the economy, a lot of attention to your 9-9-9 tax plan. But let me ask you about the budget, about government spending. You have said that in your first year as president you'd like to see the budget balanced.

HERMAN CAIN:

Yes.

JUDY WOODRUFF:

Rick Perry has said he's got a plan that would do it, what, in eight years. Paul Ryan would do it in 30 years. It would take a huge, a mammoth cut of $1.6 trillion to get that budget in balance the first year.

HERMAN CAIN:

Right.

JUDY WOODRUFF:

So my question is, what would you cut out of the biggest programs — Medicare, Social Security, defense?

HERMAN CAIN:

Well, we got to make sure we're talking apples and apples here. What I'm referring to is in my first year – in the first full fiscal year of my presidency, because remember, when you are sworn in, you inherit a fiscal year. The first full fiscal year, my objective is to have a fiscal year balanced budget. Here's how.

First, grow this economy robustly. It is projected that, for this year, 2011, that our GDP annualized will probably grow right around 1.6 percent. My 9-9-9 plan, based upon a static analysis and a dynamic analysis, say that this economy will be growing at around 5 percent. So we going to have more revenue coming in because we going to have more people working and more people paying taxes. So you've got to get both of them going at the same time.

Then —

JUDY WOODRUFF:

But you still would have to cut.

HERMAN CAIN:

Let me get to the cuts. Yes, I was — I plan to do an across-the-board 10 percent cut of all of the federal agencies. I just feel intuitively that it's there.

And then, ask my Cabinet —

JUDY WOODRUFF:

Including Social Security and Medicare?

HERMAN CAIN:

No, no, no, no, no, no. No, not including Social Security and Medicare. That's a separate problem that we've got to come back and restructure. I have ideas on that. But I'm talking about the basic expenditures that runs these agencies, not the program. That's a separate problem that I want — I plan to attack. And I'm saying the agency head is going to have to do a deep dive to help find additional monies in order to be able to do that. So that's the approach that we're going to use.

JUDY WOODRUFF:

So across the board. And you think you could come up with enough money without going after the entitlements.

HERMAN CAIN:

Exactly. And the reason is growing the economy so the projection of revenues is going to be much higher. It's going to be tough, but I'm saying that that's the objective that we've set out there.

JUDY WOODRUFF:

Two international questions. First, the Middle East — Syria, where President Bashar Assad has been authorizing the murder of —

HERMAN CAIN:

Yes.

JUDY WOODRUFF:

— dissenters in that country. As president, would you be willing — would you be prepared to send American forces — either air power or ground troops, if necessary — to put a stop to that?

HERMAN CAIN:

No. And here's why, Judy. It is sad that this brutal dictator is killing his own people in order to stay in power. They have never been our friends to begin with.

My philosophy on foreign policy starts with an extension of the Reagan philosophy: peace through strength. And I've added peace through strength and clarity. It's clear they're not our friends.

Now, if there is a way for us to help the opposition without putting our men and women in uniform in harm's way, I would be open to that and I would certainly consider that.

JUDY WOODRUFF:

An example of how you could do that?

HERMAN CAIN:

Providing them —

JUDY WOODRUFF:

— weapons?

HERMAN CAIN:

Possibly. Possibly weapons, possibly food and supplies or water, if it were possible. But I would not put our men and women in harm's way simply because it is a humanitarian disaster. I don't believe in doing that. We cannot be the policemen for the world.

And so if it's clear who our friends are, clear who our enemies are, I want to first make sure that we stop giving money to our enemies. They've always been one of our enemies. And so as bad as it is from a humanitarian standpoint, we're not going to, you know, jump in there and jump in the middle there.

JUDY WOODRUFF:

China.

HERMAN CAIN:

Yes.

JUDY WOODRUFF:

Do you view China as a potential military threat to the United States?

HERMAN CAIN:

I do view China as a potential military threat to the United States.

JUDY WOODRUFF:

And what could you do as president to head that off?

HERMAN CAIN:

My China strategy is quite simply outgrow China. It gets back to economics. China has a $6 trillion economy and they're growing at approximately 10 percent. We have a $14 trillion economy — much bigger — but we're growing at an anemic 1.5, 1.6 percent. When we get our economy growing back at the rate of 5 or 6 percent that it has the ability to do, we will outgrow China.

And secondly, we already have superiority in terms of our military capability, and I plan to get away from making cutting our defense a priority and make investing in our military capability a priority, going back to my statement: peace through strength and clarity. So yes they're a military threat. They've indicated that they're trying to develop nuclear capability and they want to develop more aircraft carriers like we have. So yes, we have to consider them a military threat.

JUDY WOODRUFF:

Your campaign. You have shot to the top of the polls nationally. You are running ahead in the key early states —

HERMAN CAIN:

Yeah.

JUDY WOODRUFF:

— Iowa, New Hampshire, South Carolina. You're doing very, very well. But there was a focus group of voters this past week in the state of Ohio. All of them like you; they say what you're saying is very appealing.

HERMAN CAIN:

Right.

JUDY WOODRUFF:

But when they were asked directly, could they see you as president, not a single one of them said that they could. How do you persuade them that's not right, that you could be president?

HERMAN CAIN:

The way that I persuade them is to continue to do what I'm doing, which is taking my message to the people.

One of the reasons that I can only speculate that they had that impression is because I am the unconventional candidate. I'm running an unconventional campaign, and we're winning. We're moving up in the polls. So some people are still having to get to — get used to the fact that a businessman who solved problems can, in fact, be president of the United States of America. More and more people are getting used to that idea. A lot of the states where I have spent a lot of time, they're getting used to that idea. So I believe that people will eventually get past that fact, because I've been continuing to promote the fact that I am unconventional. I'm the businessman, not the politician.

JUDY WOODRUFF:

Any doubt in your mind you'll win the nomination — the Republican nomination?

HERMAN CAIN:

Today, no. It's not arrogance, Judy; it's called confidence. I had someone ask me one time, are you arrogant enough to be president? No, confidence. Everything that I've done in my career, I had to go into it with a lot of confidence in order to succeed, and more importantly surrounding myself with good people. That's always been one of my mantras: surround myself with good people, lay out some guiding principles, and then solve the problems that need to be solved.